Workers and businesses benefited from a Los Angeles law, similar to one passed in San Diego, that calls for higher minimum wages for employees at companies that hold city contracts, according to a study to be released today.

The law, known as the living-wage ordinance, will take effect in San Diego late this summer. It will be phased in over two years.

The law calls for companies doing business with the city to pay its workers $10 an hour, $3.25 more than the state's minimum wage, and provide health insurance coverage.

Companies that don't offer health plans must pay employees an additional $2 an hour to help them obtain their own.

Supporters, who include anti-poverty activists, labor leaders and clerics, argued that the law would help about 2,000 low-income San Diego workers, including increasing their access to health care.

Donald Cohen, president of the Center on Policy Initiatives, which spearheaded the living-wage campaign, used preliminary results given to him by the study's researchers to convince the San Diego City Council that the wage increase would not hurt businesses.

"Work has to be done," he said. "Workers are already on the job. What you get (with the higher wage) is better-paid workers who are happier workers and better workers."

The Los Angeles survey of 82 employers and 320 workers found that that city's law, passed in 1997, improved wages for 10,000 employees without the job losses detractors had warned would result.

"These wage increases went to genuinely low-income workers and genuinely poor families," said David Fairris, one of the authors of the study and an economics professor at the University of California Riverside. "Reduction in employment was minimal."

The study, which began in 2001, was conducted in partnership with a University of California Los Angeles researcher and the Los Angeles Alliance for a New Economy, a backer of the living-wage law. It was partially funded by Los Angeles World Airports, which employs nearly two-thirds of those who received higher wages after the law passed.

The study found that 55 percent of the workers whose pay increased because of the wage ordinance had annual incomes at or near the poverty level, which is $19,350 for a family of four. The average annual pay increase per worker was $2,600.

Businesses holding contracts with the city of Los Angeles shed about 112 jobs after the law took effect, the researchers said, but experienced lower absentee rates and less worker turnover.

Employers did not set up new health care plans because of the law, but in some cases extended coverage to previously uninsured workers.

"It was just not a big enough credit to induce that kind of action," said David Runsten, one of the study's authors and an associate director of a UCLA center that studies the economies of Central and South America and the Pacific Rim.

Los Angeles is one of more than 120 cities nationwide that have living-wage ordinances. Other large cities with the law include New York, Chicago and Boston; other California cities with living-wage ordinances include San Francisco, Sacramento and Oakland.

San Diego employers and industry groups that wanted the City Council to reject the law argued that businesses would have to cut jobs and pass costs to taxpayers and consumers to afford the mandated wage increases. The council narrowly approved the ordinance, 5-4, on April 12.

Opponents also pointed to the city's fragile financial state to argue that San Diego cannot afford additional expenses. City projections indicate annual contract costs could rise by $3 million, but Cohen has said that estimate is too high.

City leaders are trying to figure out how to contend with a $1.4 billion unfunded pension liability, falling credit ratings and four years of increasingly severe budget cuts.

John Sanders, vice president for operations at the ipayOne Center at the Sports Arena, a city property leased by a private group, opposed the law. He said he is trying to plan the venue's response to it but is waiting for the city to clarify exactly how it will be enacted and to whom it will apply.

The provisions of the living-wage ordinance affect several types of businesses that hold city contracts valued at $25,000 or more. Companies with fewer than 12 employees are exempt.

Companies doing business with the city must begin following the law this year by enacting new policies, including protecting workers from job loss if another company takes over a contract. Companies will have to start paying the higher wages in 2006 and 2007.

"If it's something we have to do, we have to do it, but we want to do it right," Sanders said.

No in-depth studies of the effects of the San Diego living-wage ordinance are planned, Cohen said, but he said his group will interview workers and employers once the law has been implemented.

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The study, "Examining the Evidence: The Impact of the Los Angeles Living Wage Ordinance on Workers and Businesses" is on the Web at losangeleslivingwagestudy.org.